Key Points

  • India has long been an important source of highly skilled migrants (both professionals and students), particularly to developed countries, making ‘brain drain’ an area of concern.
  • Despite the large number of skilled migrant workers living abroad, the majority of the country’s remittances come from the low- and semi-skilled migrants working in countries of the Gulf Cooperation Council (GCC)2 and in South-East Asian countries, such as Singapore and Malaysia.
  • Many of the poor interested in working in GCC countries are deterred by the extremely high cost for low-skilled workers to migrate, ranging from $1,199 to Kuwait to $1,658 to Saudi Arabia (Zachariah and Rajan 2010).
  • India is projected to be a net out-migration country during the next two or three decades due to its demographic structure (India, Planning Commission 2009).
  • Many migrants utilize unofficial channels, referred to as hawala, to remit to India due to high service fees charged by money transfer agencies, lack of intermediary banks and limited knowledge about banking operations (Singh 2010).


2 The member States of the GCC are Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and United Arab Emirates.